Bombay High Court Rejects Suit Filed By Lilavati Kirtilal Mehta Medical Trust Against Trustee, Says Consent Of Charity Commissioner Needed

The Bombay High Court has held that where a suit is instituted by a public trust for recovery of compensation or other reliefs against an erstwhile trustee in respect of trust property, such suit must comply with Sections 50 and 51 of the Maharashtra Public Trusts Act, 1950, and cannot be instituted without first obtaining the written consent of the Charity Commissioner. The Court held that since the defendant was consistently described as a trustee, permanent trustee, or erstwhile trustee of the Trust, the consent requirement was attracted.Justice Milind N. Jadhav was hearing an application under Order VII Rule 11(d) CPC filed by the defendant seeking rejection of the plaint in Suit No. 23 of 2025 instituted by Lilavati Kirtilal Mehta Medical Trust. The Trust sought to recover compensation exceeding ₹17 crores for the defendant's occupation and use of a flat and an office on the 3rd floor of the Lilavati Hospital premises between 2007 and 2015. The plaint recorded that the defendant functioned as a permanent trustee of the Trust between 2001 and December 2023, that his occupation of the suit premises took place during his tenure as trustee, and that he misused his position by continuing in occupation. The defendant argued that the Trust's claim required the written consent of the Charity Commissioner under Section 51 before instituting the suit. The Court rejected the Trust's contention that the defendant was a trespasser and therefore outside the ambit of Section 50. It held that the averments in the plaint, read holistically with the numerous documents annexed, unequivocally showed that the Trust itself had acknowledged the defendant as trustee, permanent trustee or erstwhile trustee in multiple correspondences, pleadings, and communications. After this acknowledgement, the Plaintiff was required to comply with the provisions of Section 50 of the MPT Act. It observed:“Once such a case is made out in the Suit plaint that Defendant was a Trustee / permanent Trustee / erstwhile Trustee of Plaintiff No.1 – Trust, then the Suit as filed by Plaintiffs is clearly amenable to the provisions of Section 50 of the MPT Act.”The Court noted that Section 51 explicitly requires persons having an interest in a public trust to apply for written consent before instituting any suit covered by Section 50, and that the grant or refusal of consent must follow an enquiry by the Charity Commissioner. It observed:“… if the persons having an interest in any public trust intend to file a suit of the nature specified under Section 50, they shall apply to the Charity Commissioner in writing for his consent and after hearing the parties and making such enquiries (if any), the Charity Commissioner may within a period of six months from the date on which the Application is made, grant or refuse his consent to the institution of such suit,” the Court observed. Accordingly, the High Court allowed the defendant's application and rejected the plaintiff's application as being barred under Section 50 read with Section 51 of the MPT Act for want of mandatory consent. Pending applications were disposed of. Case Title: Niket Mehta v. Lilavati Kirtilal Mehta Medical Trust & Ors. [INTERIM APPLICATION NO. 3243 OF 2025 WITH INTERIM APPLICATION NO. 4005 OF 2025 IN SUIT NO. 23 OF 2025]Click Here To Read/Download Order

Bombay High Court Rejects Suit Filed By Lilavati Kirtilal Mehta Medical Trust Against Trustee, Says Consent Of Charity Commissioner Needed

Saksham Vaishya

Tags